November 25, 2024

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SK Specialty's logo at its headquarters in Yeongju, North Gyeongsang Province (SK Specialty)

Hahn & Co., a major private equity firm based in Korea, is set to acquire SK Specialty, a gas supplier under the country's chip-to-energy conglomerate, SK Group, for an estimated 4 trillion won ($3.05 billion).

SK Inc., the holdings company of the group, announced through a regulatory filing on Monday that the private equity house has been named the preferred bidder for SK Specialty.

“(SK) plans to sign a stock purchase agreement with the bidder within this year, after discussing the conditions of the deal and conducting due diligence,” the filing read.

SK said it plans to maintain a portion of its stake in SK Specialty, considering its synergy with the group's semiconductor business.

SK Specialty, previously named SK Materials, produces special gases used in semiconductor, liquid-crystal display and solar cell manufacturing processes. It is a major supplier of nitrogen trifluoride, a key material used for chip production, taking up 40 percent of the global consumption.

Rumors surfaced in August that SK will sell the gas unit to a private equity firm as part of its move to restructure the group’s affiliates to increase efficiency. Hahn & Co. has been mentioned as a possible bidder, considering its close ties with the group.

In recent years, Hahn & Co. has acquired stakes in SK companies over the past seven years, including in: SK Enpulse's fine ceramics business (now-named Solmix), SKC's industrial film business (SK Microworks), SK Chemicals' bio-energy business (SK Eco Prime), wet bulk shipping company SK Shipping, real estate and renewable energy developer SK D&D and SK Encar's secondhand car retail business.

SK Specialty has been posting over 100 billion won in yearly profit. In the first half of this year, it logged 355 billion won in sales, and 54 billion won in operating profit. Last year, it posted 681 billion won in sales and 147 billion won in operating profit.

With the sales, SK is expected to accelerate its rebalancing efforts, focusing on future growth drivers such as semiconductors and secondary battery. Earlier this month, SK Group sold off its stake in Vietnamese retailer WinCommerce to its parent company Masan Group and secured 270 billion won cash flow.

SK Networks sold off the ownership stake in SK Rent-a-Car, the nation's No. 2 rental car service company, to Affinity Equity Partners at 820 billion won. SK Ecoplant also secured over $98 million by selling its stake in the American battery recycling firm Ascend Elements to SKS PE, a Seoul-based private equity firm.

By Im Eun-byel (silverstar@heraldcorp.com)